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Interaction of Legality and Morals in Business


What is the correlation between legal regulatory norms and the norms of morals? Under the term legal regulatory norms, it is understood as the obligatory, and formally defined rule of behavior established or authorized and protected by the state. Morals – a major social institution is one of the forms of public consciousness. It represents a known set of historically developing and evolving vital principles, views, evaluations, and beliefs on which the norms of behavior are based. These views are defining and regulating the relations of people to each other, to the society, the state, and the surrounding reality.

Interaction of legality and morals in business is a difficult and many-sided process. Actively influencing morals, the regulatory norms promote their deeper rooting in the society, at the same time the norms under the influence of the moral factor are constantly enriched: the moral basis extends, the authority raises, and the role of these norms as a regulator of public relations increases.

Nevertheless, the regulatory norms do not necessarily include all the possible scenarios related to ethical standards. In that sense, this paper analyzes possible business situations in which the legal regulatory requirements are not up to ethical standards. The paper uses the example of the company “Diversified Worldwide Industries” (DWI).


The theme of business ethics is covered in mass media mainly in the business context. It can be understood, as in business the importance and the cost of solving ethical problems are extremely high. The failure to comply with ethical rules of behavior in a civilized economy results not only in the application of penalties and sanctions but also in the loss of reputation of the company and up to business destruction. On the other hand, compliance with the ethical standards of behavior accepted in a society strengthens the company’s positions in the market, providing competitive advantages in the form of consumers’ loyalty, excellent reputation, creation of positive working atmosphere and the attraction of professional and responsible human resources.

The regulatory norms that can be taken as examples might consider different areas of implementation. An example of regulatory norms that consider racial discrimination are the cases related to the Civil Rights Act of 1964 which absolutely bar discrimination based on race or national origin in public accommodations, (P.L. 88-352, § 201 et seq. and § 301 et seq.). However, considering a case where following these regulations can implement harm on customers of a particular facility or the staff of this facility puts a certain moral dilemma that cannot be solved by following the regulatory norms alone. Particularly, virtue-based ethics is able to inspire a serious dialogue about ethical and legal issues both in the public arena and within organizations. Laws and market forces are necessary, but not sufficient to guide the company’s decisions. One o the fundamental principles is the responsibility for the carried out policy and actions in the business sphere as well as the respect of human dignity and life. In describing the company’s culture, two approaches might apply: concern for the well beings of the employees inside the company and concern for performance,.i.e. the efforts to focus on output and employees productivity (Ferrell, Fraedrich, &Ferrell, 2008).

Another possible situation that might exploit the legal regulatory requirements is considered in the field of telecommunication. Considering the cases of misuse of telephone numbers of game shows by minors can lead to a number of lawsuits. The company cannot be responsible for the fact of misuse of a particular service for adults, in case this service particularly was not promoted to minors. Applying only legal regulatory laws the company can force the customers to pay their bills regardless of the age of the user in a particular family, otherwise the contract can be eliminated. Following the ethical rules, the company can offer the customers a request to block the ability to call certain services and never promote the advancements of the cases to courts. “For Duska, the first step towards identifying the purpose of business, then, is to realize that business as a social practice was invented to serve a larger social good, in this case ‘‘to help itself (society) develop and survive”(Kline, 2006)

The last possible business situation can be related to the aspect of HR management. In that sense the field of HR management can be sensitive as many cases of discrimination can be mixed with the general recommendations made by the HR managers. The case can be described as a refusal of promoting a certain employee. However, when this employee is of ethnic descent, the application of the laws can take an ethical perspective which should be considered and analyzed. The tension of the ethical aspect, i.e. obvious necessity to be considered can be defined by a number of predicted factors. It is a question of the scale of the moral consequences, both positive, and negative; a social consensus – degrees of moral approval or condemnation by the society, customers, or the employees of the organization of the decision or the action; the probabilities of the harm or the benefits of the made decision for interested groups. Defining the responsibility of the ethical aspect, it should be described as a complex process depending on the morals of managers making the decision and their position in the hierarchy.


In many countries at the present time, the ethics of business are closely connected with the legal aspects, which are proved by numerous examples from business practices. This interrelation carries complex and simultaneously stimulating attributes for the development of both the legal regulatory aspect and ethics. In the center of the moral and legal regulations, there are basic questions of social life; both morals and legality operate with some general principles, criteria and concepts of rights, duties, and evidence.

The opinion according to which, the problems of business ethics can be considerably simplified or eliminated if translated to legal context and transferred to lawyers. In general, this approach can be expressed by the following phrase: “if it is legal, it is moral”. A similar approach, if accepted, undoubtedly would simplify many business problems. However, the overwhelming majority of experts agree in the opinion that nevertheless, it is necessary to establish a distinction between a moral and legal estimation of any phenomenon. Despite the intersections between legality and morals, regulatory norms cannot be considered as a reflection and an embodiment of the moral standards of a society, although they are directly engaged in the regulation of morals.


  1. Crane, A., & Matten, D. (2007). Business ethics: managing corporate citizenship and sustainability in the age of globalization (2nd ed.). Oxford; New York: Oxford University Press.
  2. Ferrell,Fraedrich,&Ferrell. (2008). Business ethics: Ethical decision making and cases.Boston, MA: Houghton Mifflin Company.
  3. Goodpaster, K. E. (2007). Conscience and corporate culture. Malden, MA: Blackwell Pub.
  4. McCoy, B. H., & Stanford University. Center for Social Innovation. (2007). Living into leadership: a journey in ethics. Stanford, Calif.: Stanford Business Books.
  5. Title II of the Civil Rights Act (1964) P.L. 88-352, § 201 et seq.
  6. William Kline. (2006). ‘Business Ethics from the Internal Point of View’. Journal of Business Ethics, 64(1), 57.

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